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Income Tax Appellate Tribunal, “DB”, BENCH AMRITSAR
Before: SHRI N.K. CHOUDHRY, JM & DR. A.L.SAINI, AM
आदेश / O R D E R Per Dr. A.L. Saini:
The captioned appeal filed by the assessee, pertaining to assessment year 2009- 10, is directed against the order passed by the Commissioner of Income Tax (Appeals)-2, Amritsar [in short ‘CIT(A)’],in appeal No.10485/2016-17, which in turn arises out of an assessment order passed by the Assessing Officer u/s 144 r.w.s. 147 of the Income Tax Act, 1961 (in short the ‘Act’) dated 19.12.2016.
In this appeal, assessee has raised twelve grounds of appeal, however, during the course of hearing the ld Counsel informs the Bench that assessee does not want to press ground numbers 1, 2, 5,8,9, 10, 11, and 12 therefore, we dismiss these grounds as not pressed. Other remaining main grounds raised by the assessee are as follows:
That the Ld. Assessing Officer has erred in law while passing the Assessment Order u/s 144 of Income-tax Act, 1961 instead of u/s 143(3) of Income-tax Act, 1961, which proves that Assessment framed by him was without application of mind and in post haste manner and the Worthy CIT(A) has impliedly approved it without going through the facts of the case and adjudicate this ground of appeal without application of mind.
ITA No.579/ASR/2017 AY: 2009-10 Sh. Kuldip Singh.
That the Ld. Assessing Officer has erred in law for assuming jurisdiction to make reassessment u/s 148 without fulfilling the mandatory requirement of service of notice u/s 148 of Income-tax Act, 1961 within stipulated period as provided by law as well as reopening based on AIR information only and the Worthy CIT(A) has impliedly approved it without going through the facts of the case and adjudicate this ground of appeal without application of mind.
That the learned AO has reopened the re-assessment in post haste manner on 29-3- 2016 based on AIR information available on AST and as such belief formed by him is wrong which is subject matter of the reopening of the case for this particular assessment year and he did not conduct his own investigations to satisfy himself about the correctness of particulars before reasons recorded, which is totally erroneous and untenable. The reasons recorded for reopening are vague and there in no live nexus between the reasons recorded and the income escaping assessment and the Worthy CIT(A) has impliedly approved it without going through the facts of the case and adjudicate this ground of appeal without application of mind.
That the learned AO has erred on facts and in law in reopening of re-assessment is bad and liable to be quashed as the reasons recorded for reopening the assessment does not meet the statutory requirements of section 147 of the Income-tax Act, 1961. The reason recorded by the AO is totally based on AIR information available on AST and initiation of proceedings was without any material for escapement of income for assessment year under consideration and the Worthy CIT(A) has impliedly approved it without going through the facts of the case and adjudicate this ground of appeal without application of mind.
The facts of the case which can be stated quite shortly are as follows: The reopening proceedings under section 147 of the Act, in assessee`s case were initiated by issue of notice u/s 148 of the Income Tax Act, 1961, on 29.03.2016. As per information available on record, the AO noticed that Sh. Kuldip Singh S/O Sh. Pooran Singh, MiranKot Khurd, P.O. MiranKot Kalan, Amritsar had made cash deposits of Rs. 1,02,84,360/- in Saving Bank A/c No. 001496 maintained with Canara Bank, during the financial year 2008-09 which was not disclosed by assessee. Therefore, anotice u/s 148 of the Act was issued on 29.03.2016. The AO again issued notice u/s 142(1) of the Act. In response to notice u/s 142(1), Shri Mandeep Singh AR appeared before AO and furnished the Power of Attorney and attended the assessment proceeding from time to time and written reply dated 29.11.2016 furnished. The AR also furnished before AO the copies of convince deed of land sold by the assessee`s father Shri Puran Singh at Rs. 19,24,000/-.Assessee`s Reply dated 29.11.2016 is reproduced below:
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ITA No.579/ASR/2017 AY: 2009-10 Sh. Kuldip Singh. With reference to above stated subject, please find the under mentioned details. With reference to your query no 1 regarding nature of business or profession carried out during the period 01.04.2008 to 31.03.2009: This is to state that during the period under reference I was doing agricultural operations on the land owned by my father. With reference to your query no 2 regarding list of all accounts/deposits jointly or severally held during the F.Y. 2008-09 along with statement of account. This is to bring to your kind attention that I owned only one saving account with Canara Bank, branch Mirankot Kalan, Amritsar bearing account no. 01496. The said account detail is attached herewith for your reference. With reference to your query no 3 regarding statement of investments in purchase/sale of immovable property with supporting documentary evidences. This is to bring to your kind attention that during the relevant financial year I did not make any investments in purchase of immovable property. With reference to your query regarding source of credit entries of Rs. 1,04,56,220/- in the bank account no 001496 with Canara Bank, Amritsar: This is to state that an amount of app Rs 75 Lakhs was given as gift to me by my father on sale of agricultural land owned by him. Since he was not keeping good health and had handsome amount with him & out of which he gifted me the said amount. Ultimately he breathed his last on 03.10.2008. (Copy of death certificate is attached herewith for your ready reference). Copy of the agreement entered into by him in the year 2006 for sale of his agricultural land is also attached herewith for your ready reference. With reference to your query regarding detail of interest earned/accrued during the financial year 2008-09: This is submit that during the period under reference bank credited Rs 41789/- as interest for the period 2008-09.”
On 15.12.2016 Sh. Mandeep Singh AR of the assessee appeared before AO. The assessing officer as per order sheet query dated 15.12.2016, asked the AR to explain the cash deposit of Rs.1,02,84,360/-. On 16.12.2016, Sh. Mandeep Singh AR of the assessee again appeared before AO and furnished written reply, which is reproduced below:-
“Reply dated 16.12.2016 which is as under:- With reference to above stated subject, please find the under mentioned details With reference to above, this is to state that assessee was a agriculturist during the period under reference & was helping his father in performing agricultural operations as no land was owned by him personally but was helping in cultivating the land owned by his father. Assessee do not have any source of income except
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ITA No.579/ASR/2017 AY: 2009-10 Sh. Kuldip Singh. from saving account interest received by him from bank. Income tax return as prepared in response to notice is attached herewith. During the course of last hearing, the assessee has been allowed to inspect the file & found the following reasons have been recorded: “Assessee has made cash deposit of Rs. 1,02,84,360/- during the F.Y. 2008-09, So I have reason to believe that income chargeable to tax for the A.Y. 2009-10 has escaped assessment within the meaning of section 147 of the Income Tax Act” Objections against reasons recorded
The reasons have been recorded on vague information. These reasons are not reasons in the eyes of law since they have recorded merely on vague information which cannot be held in ‘Bir Bahadu Singh Saijwali vs. ITO, Ward-1, Haldwani’ 53 Taxman. Co. 366 (Delhi-Trib). 2. The only material available before your goodself was AIR information of the assessee having deposited Rs. 102.84 lakhs in his saving bank account. 3. The mere fact that the deposits were made in a bank account does not indicate that these deposits have constituted an income which has escaped assessment. In a recent case of Hon’ble ITAT, Amritsar in ITA no. 129(ASR)/2015, it was held that the reopening u/s 148 done on the basis of AIR information is invalid. The copy of order is enclosed for your ready reference. You are requested to dispose of these objections before taking the assessment proceeding u/s 143(2)/147.”
On 19.12.2016 Sh. Mandeep Singh AR of the assessee appeared before AO and furnished written as follows:
“Reply dated 19.12.2016 which is as under:- With reference to above stated subject, please find the under mentioned details. With reference to above, this is to state that assessee got cash gifts from his father who was a agriculturist & in the year 2008-09 was on his death bed and ultimately expired on 03.10.2010 but before he expired, he gave certain money to his son Kuldip Singh out of love & affection and the same was received by him from the sale proceeds of agricultural land owned by him. Out of his total land holding sold by him, copies of some of the title deeds have been procured after a lot of efforts which are worth around Rs. 24 lakhs. Copies of other title deeds of the land holding sold by my father could not be traced in spite of best of my efforts. The entire money deposited in my bank account was given to me by my father out of sale proceeds of agricultural land it might be possible that the money given to me by him also include the amount of sale consideration but not depicted therein.”
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ITA No.579/ASR/2017 AY: 2009-10 Sh. Kuldip Singh. 6. However, AO rejected the contention of the assessee and held that the authorized representative of the assessee had not furnished concrete evidence about the deposits of Rs.1,02,84,360/-, no any gift proof of Rs. 75,00,000/- furnished by the assessee AR which remained unexplained and peak amount of Rs. 1,02,84,360/- after withdrawals comes to Rs. 68,50,000/- for which no satisfactory reply with corroborative documentary evidence had been filed by the assessee. Therefore, AO made addition to the tune of Rs.68,50,000/-.
Aggrieved by the order of the ld. AO the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the reopening of assessment u/s 147 of the Act, as valid and therefore confirmed the addition made by the AO partly. Aggrieved by the order of ld CIT(A), the assessee is in appeal before us.
The ld. Counsel for the assessee has relied on submissions made before the authorities below. On the other hand, the ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity.
We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. Before us, ld Counsel submitted copy of bank statement (pb 1-2). The ld Counsel submitted copy of notice under section 148 of the Act, which was issued by AO on 29.03.2016 (pb 3). The ld Counsel submitted copy of acknowledgement issued by postal authorities regarding date of service of notice on 06/04/2016, which is placed on paper book page no.4 to 5. The ld Counsel submitted copy of reply and objections against reason recorded filed before the AO during assessment proceedings (pb 8-11). A copy of death certificate of father of the assessee is placed on paper book page 12. The ld Counsel submitted copy of registered sale deed executed by his father during his life time and sale proceeds were deposited in the bank account of the assessee (pb13to 27).The ld Counsel submitted copy of
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ITA No.579/ASR/2017 AY: 2009-10 Sh. Kuldip Singh. Jamabandi in lieu of proof that the assessee and his father was agriculturist and have sufficient agricultural land (pb 28-35).
We note that these evidences, documents and facts as narrated above were there before the assessing officer during the reassessment proceedings. The assessing officer took these documents on record but did not comment that why these documents were false or untrue. Assessee submitted before AO that he owned only one saving account with Canara Bank, branch Mirankot Kalan, Amritsar bearing account No. 01496 and assessee informed the AO that his father sold some land and sale proceeds were deposited in the bank account of the assessee. The AO has not rejected the sale deed executed by his father. The assessee has also submitted that his father has gifted him a sum of Rs.75 lakhs during his life time. The assessee has also furnished before the AO the ‘Jamabandi’ the record of land which proves that the assessee and his father were agriculturist and have sufficient agricultural land and the AO has not rejected the same. The assessing officer failed to bring on record any cogent evidence to prove that sale deed executed by assessee`s father was wrong and ‘Jamabandi’ the record of land was false or untrue. The ld Counsel submits that since the agricultural income is exempt from tax therefore assessee has not offered for taxation. Since the assessee explained the source of bank deposits therefore income has not escaped assessment within the meaning of section 147 of the Act. Hence, according the assessee there is no escapement of income u/s 147 of the Act.
The SMC Bench of this Tribunal,in the case of Shri Ashwani Kumar, in ITA No. 129/ASR/2015, A.Y.2005-06, on identical facts held that there is no escapement of income under section 147 of the Act. The findings of the SMC Bench are given below:
“7. The facts are not disputed. A bare perusal of the reasons recorded for issuance of notice u/s 148 of the Act, shows that the only material available before the AO was the AIR information of the assessee having deposited an amount of Rs.11.60 lakhs in his savings bank account. Remarkably, the reasons recorded did not even mention the bank in which such savings bank account was maintained. The assessee, as available from the first page of the assessment order, was issued notice u/s 148 of the Act, in pursuance to
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ITA No.579/ASR/2017 AY: 2009-10 Sh. Kuldip Singh.
the aforesaid reasons. The assessment order under section 143(3) of the Act is dated 25.03.2013. The assessee had filed the return of income on 05.10.2005 and it had been stated in response to the notice u/s 148 of the Act that this return be treated as having been filed in response to this notice. In 'Bir Bahadur Singh Sijwali' (supra); like in the present case, the reasons Assessment year: 2005-06 recorded indicated that cash deposits had been made in the bank account of the assessee. The Tribunal held that the mere fact that the deposits having been made in a bank account does not indicate that these deposits constitute an income which has escaped assessment. It was observed that the reasons recorded did not make out a case that the assessee was engaged in some business and the income from such a business had not been returned by the assessee. In the case at hand also, the reasons recorded do not contain any such recital. The Tribunal held that the factum per se, of deposits in the bank account of the assessee could not be made the basis for holding the view that income had escaped assessment, over-looking that the sources of the deposits need not necessarily be the income of the assessee; and that as such, the reasons recorded were not sufficient to believe escapement of income; that rather, they were reasons to suspect escapement of income, which was not enough for issuance of a notice u/s 148 of the Act:
'Bir Bahadur Singh Sijwali' (supra), as discussed, is clearly applicable to the present case. No decision to the contrary has been cited before me.
In view of the above, finding merit in the grievance raised by the assessee by way of Ground no. 1, the reasons recorded by the AO for issuance of notice u/s 148 of the Act are held to be invalid, being reasons not sufficient to believe escapement of income,- based on vague information. All the proceedings pursuant thereto, including the Assessment year: 2005-06 assessment order dated 25.03.2013 and the impugned order dated 29.01.2015 are thus annulled and cancelled. Accordingly, all the other issues on merits are rendered academic and infructuous.”
Based on the factual position narrated above, we note that there is no escapement of income u/s 147 of the Act, hence we quash the reassessment proceedings initiated by assessing officer.
In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 30.12.2019.
Sd/- Sd/- (N.K. CHOUDHRY) (A.L.SAINI) %या�यकसद�य / JUDICIAL MEMBER लेखासद�य / ACCOUNTANT MEMBER AmritsarAmritsar &दनांक/ Date: 30/12/2019 (BCG, PS)
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ITA No.579/ASR/2017 AY: 2009-10 Sh. Kuldip Singh.
Copy of the order forwarded to: 1. Sh. Kuldip Singh, Vill: MiranKot Khurd,P.O. MiranKot Kalan,Amritsar (Punjab). 2. Income Tax Officer,Ward-5(3),Amritsar (Punjab). 3. C.I.T(A)-2, Amritsar. 4. C.I.T.- concerned. 5. The Sr. DR, I.T.A.T., Amritsar.
True Order By Order
Assistant Registrar ITAT, Amritsar Bench
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